Interim Revised Notice of Intent to Contact Third-Parties Procedures Issued by IRS

The Self-Employed/Small Business (SBSE) Division of the IRS has a memorandum outlining revised procedures for third party contact in SBSE-04-0719-0034.[1]  The revised procedures reflect changes made to IRC §7602(c)(1) by the Taxpayer First Act of 2019.

IRC §7602(c)(1), both before and after amendment, required the IRS to provide notice to the taxpayer prior to contacting third parties.  The IRS had taken the position, noted in the Internal Revenue Manual at IRM 25.27, Third Party Contacts, that providing the taxpayer with Publication 1, Your Rights as a Taxpayer, was sufficient notice under the prior law.

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Assistant US Attorney Comments on Issues Related to Preparer's Criminal Exposure Under §7602(2)

An article in Tax Notes Today outlining comments made by an assistant U.S. attorney based in New Haven, Connecticut highlighted that tax preparers may get entangled in criminal tax prosecutions when they fail to insure clients are properly documenting loans from a business.[1]

Christopher W. Schmeisser was speaking at a criminal tax conference held at Quinnipiac University School of Law in North Haven, Connecticut.  Mr. Schmeisser indicated that loans are often used as part of a scheme for a taxpayer to avoid paying taxes.

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